MPC decision welcomed

Posted: 07 Mar 2008 11:07:22 GMT

Organisations within the housing market have largely welcomed the decision to freeze the base rate of interest in March.

Organisations within the housing market have largely welcomed the decision to freeze the base rate of interest in March.

The Bank of England's Monetary Policy Committee (MPC) has revealed that the rate will remain at 5.25 per cent in the month.

The majority of analysts had forecast that the rate would be maintained and the Royal Institution of Chartered Surveyors (Rics) was not surprised by the decision.

"Rics believes that this was the appropriate decision following the lowering in rates in both December and February," said Simon Rubinsohn, the organisation's chief economist.

"It would be highly unusual if the impact of a credit contraction on the scale currently under way was to be limited to just the property market. We suspect that it will gradually infect other parts of the economy and eventually lead the Bank to cut base rates further.

"Our judgement is that the next move will be in May," he added.

Abbey's chief economist, Barry Naisbitt, also anticipates seeing a cut to the base rate "in the next couple of months".

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